Fear of Outliving Your Money

A few weeks ago we focused on “longevity risk.” We had a Twitter poll asking our radio listeners if they were afraid of running out of money and received an alarming response—100% of the respondents said yes. And these respondents aren’t the only ones. The number one concern for a retiree in almost every poll you can find is… “Running out of money.”

That is a horrible fear to carry forward with. Retirement is a 20-40 year time frame, but we know retirement is a 20-40 year time frame. And knowing this, we should plan for it. Furthermore, 20-40 years of worry is completely unacceptable. And finally: there are treatments for this condition—your choices and/or cure-all remedies. So let’s begin with the cure all solutions.

We all want our cake and to eat it to—we all want the miracle drug. So, what is it?

Is it CDs and cash?

Is it gold?

Is it bonds?

Is it “guaranteed income for life” from an annuity?

Is it an “income bucket strategy?”

Is it a 3% or 4% withdrawal rate?

We see and hear advertisements all of the time guaranteeing this or that, usually by old, familiar celebrity faces. They make you feel safe, but there are just as many risks in each of these as there is reward. I can GUARANTEE you that. In other words, you better know what you are doing. Does it mean these are all bad? Absolutely not. It just means there is no “one size fits all.” Could these so-called remedies cure your fear of running out of money? Potentially - but not always by themselves. Just as your doctor will tell you that starting blood pressure medication won’t cure everything, part of the prescription is your choices—food, sleep, exercise and limiting stress.

Yes, we all want our cake and to eat it to…but is this a realistic expectation? First things first, you need to determine your real underlying expectations. What are the most important things about life to you? What are the most important things about money to you? Why are these important? Why? Until you get to the point that your answer is taking care of yourself, your family, your business, or your loved ones you haven’t asked yourself “why” enough. Figure out what is real and where your expectations are leading you in retirement.

Progress always starts with telling the truth – especially to yourself. This is not to say it is easy to tell yourself the truth. Sometimes we have to make decisions we don’t want to make, but by not making those decisions we have, in reality, made one. Sometimes those decisions are about you and your habits, but often the harder ones are about your family—most often “when to say no.”

So, here it comes—What choices do you need to make to mitigate the fear of running out of money? We commonly ask families these three questions when it comes to their financial plans.

Could you? Could you make a few changes if you needed to?

Would you? Would you actually make these changes?

When? If so, when? Every year lost is lost to a year of worry. Is it worth it?

Consider this. What if you took a few hours to wipe away the worry for the next 20-40 years? This is the last week of our “Longevity Awareness Program.” Take advantage and call in this week to get your free assessment.

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